What does the situation in Ukraine mean to your savings?

You have probably noticed that the costs of, for example, heating and electricity and the price of goods are rising. The rising prices are due to, among other things, the war in Ukraine and global COVID-19-induced production shutdowns. All this affects your day-to-day finances.

Similarly, various factors are currently impacting your pension savings. The financial markets are affected by rising inflation and the uncertainty brought about by the war in Ukraine. As a result, over the past few months, we have seen equity market setbacks, significant increases in interest rates and accompanying drops in bond prices. This affects your savings.

Your savings will go up and they will go down
We invest to grow your savings so that you will receive the highest possible amount of benefits when you retire.

Your savings are invested in equities, bonds, real estate and infrastructure (e.g. wind turbines, new roads and bridges). In times of uncertainty – such as war or financial crisis – equities typically lose the most value. When equity prices go down, so do your savings.

When things were at their worst at the beginning of March, global equity markets had lost more than 10% since 1 January 2022. By now, however, they have rallied and recovered much of their losses.

If you sign in to pension.dk, your savings overview will show exactly how much your savings have gone up or down.

See how your savings are developing

Claus Stampe, PensionDanmark’s Chief Investment Officer, elaborates:
“All our members have seen their savings decline due to rising interest rates and equity market turmoil. But overall, we’ve escaped relatively unscathed from the market turmoil witnessed in recent months. At the end of March, the year-to-date return for a typical member was negative by 1-2%. We don’t like to lose money on our investments. However, year-to-date returns should also be seen in light of the very strong returns generated over the past few years that have caused our members’ savings to grow. In 2021, for example, all our members under the age of 46 received a return of 16%.”

Read more about how we invest your money

Updated on 20 April 2022